A limited constitutional government calls for a rules-based, freemarket monetary system, not the topsy-turvy fiat dollar that now exists under central banking. This issue of the Cato Journal examines the case for alternatives to central banking and the reforms needed to move toward free-market money.

The more widespread use of body cameras will make it easier for the American public to better understand how police officers do their jobs and under what circumstances they feel that it is necessary to resort to deadly force.

Americans are finally enjoying an improving economy after years of recession and slow growth. The unemployment rate is dropping, the economy is expanding, and public confidence is rising. Surely our economic crisis is behind us. Or is it? In Going for Broke: Deficits, Debt, and the Entitlement Crisis, Cato scholar Michael D. Tanner examines the growing national debt and its dire implications for our future and explains why a looming financial meltdown may be far worse than anyone expects.

The Cato Institute has released its 2014 Annual Report, which documents a dynamic year of growth and productivity. “Libertarianism is not just a framework for utopia,” Cato’s David Boaz writes in his book, The Libertarian Mind. “It is the indispensable framework for the future.” And as the new report demonstrates, the Cato Institute, thanks largely to the generosity of our Sponsors, is leading the charge to apply this framework across the policy spectrum.

Tag: Obamacare

Tonight, President Obama will deliver his annual State of the Union address to Congress. He will no doubt boast that his administration has enrolled 6.8 million individuals in ObamaCare plans in the 37 states with federal Exchanges – i.e., through HealthCare.gov – and a couple million more in the few states that established their own Exchanges. The State of the Union would also be a good time for the president to be honest with those HealthCare.gov enrollees, especially the roughly 6 million of them who are purchasing coverage with the help of federal subsidies, about the risks to which he has exposed them.

The Patient Protection and Affordable Care Act, which the president himself signed, expressly provides that those subsidies are authorized only “through an Exchange established by the State.” Since majority of American people have never supported ObamaCare, about three quarters of the states now have refused or otherwise failed to establish Exchanges.

If the president were following the law, he would not be issuing subsidies to any HealthCare.gov enrollees. Indeed, if the president had followed the law – if he had all along admitted he has no authority to subsidize HealthCare.gov enrollees – then enough of the country would have seen the full cost of ObamaCare coverage that Congress would have reopened and likely repealed the statute by now. It would have happened even before anyone lost their coverage in the “if you like your health plan you can keep it” debacle of late 2013.

Instead, President Obama insisted on violating the express language of his own health care law. The result is that he put millions of Americans in jeopardy of losing their health insurance – again.

On March 4, the Supreme Court will hear a case called King v. Burwell, one of four challenges to those illegal subsidies, and the illegal taxes that those subsidies trigger. The Court will likely issue a ruling by June. The fact that the Supreme Court agreed to consider King at all means that at least four justices believe the Fourth Circuit’s ruling for the government in King merits review.

If the justices agree with two other lowercourts, they will hold that the president is breaking the law and will put an immediate end to those illegal subsidies. Such a ruling would free the plaintiffs and more than 57 million individuals and employers from being illegally subjected to the aforementioned taxes – ObamaCare’s individual and employer mandates.

The people with whom the president most needs to be honest are the millions of Americans who enrolled in HealthCare.gov. If the Court finds those subsidies are illegal, then enrollees receiving subsidies would see their health insurance bills quadruple (on average). They would be hit with a new tax bill of up to $5,000. Their plans could disappear, and they may not be able to find a replacement. An estimated one million of these folks left jobs with secure coverage because the president promised them secure, affordable coverage through HealthCare.gov. Only he never had that power, and by pretending he did, Obama has now made coverage less secure for millions.

Instead of warning Americans of these risks of HealthCare.gov coverage, the president and his administration have been lying to HealthCare.gov enrollees. As they lost before lower courts and even as the Supreme Court agreed to hear King just days before open enrollment in HealthCare.gov began, the White Houseandadministrationofficialshaverepeated the mantra that “nothing has changed.” Watch HHS Secretary Sylvia Burwell say “nothing has changed” four times in 90 seconds (go to 3:40).

It is not true that nothing has changed, and the administration knows it isn’t true. The administration knows the risks inherent in HealthCare.gov coverage have increased, because the administration changed the agreements between HealthCare.gov and participating insurers to insert a clause allowing insurers to back out if the subsidies disappear:

CMS acknowledges that QHPI has developed its products for the FFE based on the assumption that APTCs and CSRs will be available to qualifying Enrollees. In the event that this assumption ceases to be valid during the term of this Agreement, CMS acknowledges that Issuer could have cause to terminate this Agreement subject to applicable state and federal law.

The administration made the change, reports Inside Health Policy, because insurers demanded it and because administration officials themselves “believe the clause is critical.”

What does this mean? It means the president knows that millions of HealthCare.gov enrollees are facing serious financial risks, or worse. Yet his administration is actively concealing those risks from enrollees by telling enrollees “nothing has changed.” At the same time the president is protecting insurers from the risks they face by participating in HealthCare.gov, he is not even informing consumers about the risks HealthCare.gov coverage poses for them.

The president needs to put an end to the deception, tonight. He needs to warn HealthCare.gov enrollees about the risks inherent in their coverage, so they have time to prepare. If he tells them tonight, some of those who need insurance the most might be able to find jobs with secure coverage (or other access to coverage) by the time the Court rules. He needs to tell HealthCare.gov enrollees what his contingency plans are if the Supreme Court rules that he was breaking the law and playing games with their coverage.

He can blame it all on his political opponents. He can claim to be the only honest man in Washington, for all I care. But he needs to level with HealthCare.gov enrollees tonight about the risks they are facing. To keep pretending “nothing has changed” would be a reckless lie.

Vox’s Sarah Kliff reports that Harvard University’s Theda Skocpol has produced a study purporting to show Congress intended for the Patient Protection and Affordable Care Act (PPACA) to authorize health-insurance subsidies through exchanges established by the federal government—even though the statute expressly and repeatedly says those subsidies are available only “through an Exchange established by the State.” Whether the PPACA authorizes those subsidies in the 36 states with federal exchanges is the question presented in King v. Burwell. The Supreme Court will hear oral arguments in King on March 4, with a ruling expected by June. Unfortunately for the administration and its supporters, Skocpol offers nothing either new or that supports the notion that Congress intended something other than what it expressly said in the statute.

What evidence does Skocpol claim to have found in support of her counter-textual interpretation of congressional intent? She combs through 68 analyses issued by the Congressional Budget Office during 2009 and 2010. She finds that in none of those reports did the CBO entertain the idea that the PPACA’s exchange subsidies might be available in some states but not others. She interprets this as both “excellent evidence” and “the best objective evidence we have that no one in Congress considered premium subsidies restricted to certain states to be either possible or desirable.”

Yeah, about that.

An alert Vox reader already informed Kliff that the claim that CBO never considered the possibility of exchange subsidies in some states but not others isn’t exactly true. The comprehensive health care bill approved by Democrats on the Senate’s Health, Education, Labor, and Pensions (HELP) Committee in 2009 (S. 1679) would have given states four years to establish exchanges themselves, after which point the federal government would establish an exchange. As my partner-in-crime-fighting Jonathan Adler and I write in an amicus brief filed with the Supreme Court in King:

S. 1679 asked each state to adopt certain health insurance regulations, and either establish an Exchange itself or ask the federal government to establish one “in” the state… S. 1679 withheld Exchange subsidies, as well as many of its insurance regulations, for up to four years until the state complied.

The CBO scored S. 1679 assuming that some states would establish exchanges early and some would not. Thus the agency’s cost projections assumed that exchange subsidies would be available in some states but not in others. So we’ve already got a problem with Skocpol’s analysis.

[B]rokers say they do hear from clients who are eligible for subsidies – which are based on household income and not assets – but want no part of them. Health officials have been boasting that 6.6 million people have enrolled in health coverage through state or federal marketplaces created under the Affordable Care Act, but in sharp contrast stands a small group of Americans who say they want nothing to do with the plans, even if they would save money. Their reasons vary: Some are protesting Obamacare, while others simply feel it’s unethical to accept taxpayer dollars to pay for health insurance…

For [Kansas City resident Grace] Brewer, buying a plan on her own would mean she would not have enough to pay for housing, she says, so she chose not to be insured this year and will have to pay a penalty in her 2016 tax filing that is likely to be 2 percent of her income. She has no dependents, is healthy, does not use prescriptions and says she has been careful about her health choices, not overusing medical care.

“I am frustrated. I am angry. And I say ‘no’ to the exchanges,” she says.

Some people are turning down the subsidies because they don’t need them:

Complicating the ethical question is that some people who qualify for subsidies based on their income could afford to pay their own way. “There is no question that we are enrolling people through these programs who would otherwise be considered middle-class or even affluent,” says Ed Haislmaier, a senior research fellow for health policy studies at the right-leaning Heritage Foundation think tank. “We are seeing people with enrollment in these programs that have significant assets, but for whatever reason – usually a temporary reason – fall below the income line.”

Those reasons could range from early retirement to a midcareer job change. But whatever the case, some of those who are turning down subsidies are aware others are gaming the system, and they think it’s wrong.

“I won’t be a part of it,” Brewer says. “I don’t think it’s right. I don’t think it’s ethical, but the system has gotten so complicated that people can take advantage of those things.”…

The fact that the subsidies are causing controversy among the very people they’re intended to help is “evidence that the government doesn’t do charity very well,” says Michael Cannon, director of health policy studies at the libertarian Cato Institute think tank.

“Prior to Obamacare, the federal government was subsidizing all sorts of people who did not need health insurance subsidies,” he adds, referring to services like the Children’s Health Insurance Program, Medicaid and Medicare, the government’s health program for seniors. “With Obamacare, we are subsidizing even more people who don’t need assistance.”

Something to keep in mind when contemplating the impact of King v. Burwell.

The Obama administration is boasting that 2.5 million Americans have selected health insurance plans for 2015 through the Exchanges it operates in 36 states under the Patient Protection and Affordable Care Act, and that they are well on their way to enrolling 9.1 million Americans in Exchange coverage next year. But there’s a problem. The administration is not warning ObamaCare enrollees about significant risks associated with their coverage. By mid-2015, 5 million HealthCare.gov enrollees could see their tax liabilities increase by thousands of dollars. Their premiums could increase by 300 percent or more. Their health plans could be cancelled without any replacement plans available. Today, the U.S. Senate leadership – incoming Majority Leader Mitch McConnell (R-KY), Majority Whip John Cornyn (R-TX), Conference Chairman John Thune (R-SD), Policy Committee Chairman John Barrasso (R-WY), and Conference Vice Chairman Roy Blunt (R-MO) – wrote Treasury Secretary Jacob J. Lew and Health and Human Services Secretary Sylvia M. Burwell to demand the administration inform consumers about those risks.

First, some background.

The PPACA directs states to establish health-insurance Exchanges and requires the federal government to establish Exchanges in states that fail to do so.

The statute authorizes subsidies (nominally, “tax credits”) to certain taxpayers who purchase Exchange coverage. Those subsidies transfer much of the cost of ObamaCare’s many regulations and mandates from the premium payer to the taxpayer. For the average recipient, Exchange subsidies cover 76 percent of their premium.

But there’s a catch. The law only authorizes those subsidies “through an Exchange established by the State.” The PPACA nowhere authorizes subsidies through federally established Exchanges. This makes the law’s Exchanges operate like its Medicaid expansion: if states cooperate with implementation, their residents get subsidies; if not, their residents get no subsidies.

Confounding expectations, 36 states refused or otherwise failed to establish Exchanges. This should have meant that Exchange subsidies would not be available in two-thirds of the country, and that many more Americans would face the full cost of the PPACA’s very expensive coverage.

Yet the Obama administration unilaterally decided to offer Exchange subsidies through federal Exchanges despite the lack of any statutory authorization. Because those (illegal) subsidies trigger (illegal) penalties against both individuals and employers under the PPACA’s mandates, the administration soon found itself in court.

Two federal courts have found the subsidies the administration is issuing to 5 million enrollees through HealthCare.gov are illegal. The Supreme Court has agreed to resolve the issue. It has granted certiorari in King v. Burwell. Oral arguments will likely occur in February or March, with a ruling due by June.

If the Supreme Court agrees with those lower courts that the subsidies the administration is issuing through HealthCare.gov are illegal, the repercussions for enrollees could be significant. Their subsidies would disappear. The PPACA would require them to repay the IRS whatever subsidies they already received in 2015 and 2014, which could top $10,000 for many enrollees near the poverty level. Their insurance payments would quadruple, on average. Households near the poverty level would see even larger increases. Their plans could be cancelled, and they may not be able to find replacement coverage.

The Obama administration knows it is exposing HealthCare.gov enrollees to these risks. But it is not telling them.

I applaud the Supreme Court’s decision to grant certiorari in King v. Burwell.

Since January, the Obama administration has been spending billions of unauthorized federal dollars, and subjecting nearly 60 million Americans to unauthorized taxes, all to hide the full cost of the Patient Protection and Affordable Care Act, or ObamaCare. The administration’s actions have not only violated the law and caused massive economic disruption, they have also subverted the democratic process. The plaintiffs in Pruitt v. Burwell, Halbig v. Burwell, King v. Burwell, and Indiana v. IRS seek to put an end to those unlawful taxes and spending.

The Supreme Court’s decision is a rebuke to the Obama administration and its defenders, who dismissed as frivolous the plaintiffs’ efforts to defend their right not to be taxed without congressional authorization.

It is essential that these cases receive expedited resolution, if only to eliminate the uncertainty currently facing states, employers, insurers, and taxpayers.

Most important, these cases deserve expedited consideration because only they can bring an end to the greatest domestic-policy scandal of this administration.

Click here for reference materials on these cases, including all court filings and judicial opinions. Click here for news and opinion coverage of these cases.

Republicans won an impressive number of victories last night, including a larger and more conservative House majority and enough wins to give the GOP at least a 52-seat majority in the Senate. As Jeffrey Anderson and Robert Laszewski have noted, Republicans made ObamaCare a major issue in the election (the New York Times’ denials notwithstanding). Senate Republicans will fall several seats short of the 60-vote super-majority needed to overcome a Democratic filibuster of an ObamaCare-repeal bill, though. ObamaCare opponents are therefore debating whether and how Republicans could repeal some or all of the law via the Senate’s “budget reconciliation” process, which allows certain legislation to pass the Senate with only 51 votes. Some opponents have proposed getting around these difficulties by getting rid of the filibuster entirely. I think there’s a more prudent, targeted way Republicans could put ObamaCare repeal on the president’s desk, give Democrats a taste of their own majoritarian medicine, and convince Senate Democrats of the virtues of restoring the filibuster on legislation and judicial nominations.